Q: What are the hopeful signs you see in the local real-estate market?A: Nationally, we're looking for a new economy and hope that translates into a job growth locally. We need stability, and it always begins with housing. If home prices become stable, then banks can finally go back to normal lending standards and practices and loosening things up a bit. Banks are so afraid of risks right now that they have raised the criteria so high that home buyers almost need a greater-than-perfect credit score and job history in order to secure a loan. I had a family with $95,000 down on a $195,000 loan and an average credit score, and the bank declined the loan. The lender didn't like the home they chose and thought it was a fix-and-flip. What they wanted was to be closer to the hospital so the wife could be closer to her chemotherapy treatments.

By Greg Stiles

Q: What are the hopeful signs you see in the local real-estate market?

A: Nationally, we're looking for a new economy and hope that translates into a job growth locally. We need stability, and it always begins with housing. If home prices become stable, then banks can finally go back to normal lending standards and practices and loosening things up a bit. Banks are so afraid of risks right now that they have raised the criteria so high that home buyers almost need a greater-than-perfect credit score and job history in order to secure a loan. I had a family with $95,000 down on a $195,000 loan and an average credit score, and the bank declined the loan. The lender didn't like the home they chose and thought it was a fix-and-flip. What they wanted was to be closer to the hospital so the wife could be closer to her chemotherapy treatments.

It's a Catch-22 because we keep focusing on distressed properties, and that doesn't even make up the majority of the market. If sellers have a house in the right location — and priced right — it will sell.

Q: How will interest rates affect the market in the early part of the year?

A: What I've seen in the past is that the people sitting on the fence, waiting for interest rates to go lower, jump when they see rates start to go up. In our area, for every 1 percent the rates go up, they lose $10,000 from what they can borrow. So the question is: If interest rates go up, will local home prices go down so that the would-be borrowers can still afford the same house?

Q: What factors are instigating non-distressed home sales?

A: Normal transactions ­— what we call happy sales — of non-distressed properties (are) now making up 60 percent of the market. It was 80 to 90 percent of the market in 2005-06. Sellers are taking advantage of low prices because they are finding a larger house at an affordable price, and first-time buyers are buying their homes. That's allowing people to sell for $200,000 and buy a $400,000 home. That's a different kind of move-up market than we had a few years ago. Homes that were $1.2 million are now selling for $500,000 to $600,000.

Q: How different is the buyers' mind-set now than a few years ago when buyers first became Internet-savvy?

A: First-time buyers are just wanting help to get approved. They are an average of about 28 years (old) and want help securing financing. A good Realtor finds out how much buyers are eligible to spend before they go out and look. An investor is not afraid of short sales. The buyers today will not overpay because their friends got into trouble buying back in 2005-2007, and today they are afraid of losing their homes. So they are very conscious of not overpaying. Like any buyers, they want the best they can afford. One of the biggest drivers for first-time home buyers right now is that they are tired of renting. Even though the number of houses out there is overwhelming, it's my job to find the right home and not just show them a bunch of houses. After we have the finances lined up, we do the drive-bys and then zero in on the one we're looking for. People still want to be in a good neighborhood, close to work and shopping, and good schools are still important.

Q: What do you see in the next three to four months?

A: Buyers are being very, very cautious. Right now, a lot of buyers (are) sitting on the fence waiting for new inventory, which usually comes on the market between Jan. 15 through the end of April. There's been a moratorium on foreclosures, but more of those will start showing up. KeyBank has a zero-down loan, where sellers can contribute any where from 3 to 6 percent. With some USDA loans, you can get up to 103.5-percent financing with no minimum down payment, reserves. But there are income limits; you can't make more than $44,000 in some of those neighborhoods.

We're seeing a bit of a turnaround in San Francisco and San Diego, but there is still a decline in Sacramento and Los Angeles. We're not seeing a huge influx of buyers from those areas.

Q: Do you see many buyers backing out?

A: I'm still seeing more people wanting to buy with lending institutions who won't approve them. Prices are down, and interest rates are good, but to qualify is tough.